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Trade, location, and wages in the United States

Thijs Knaap ()

No 05-30, Working Papers from Utrecht School of Economics

Abstract: This paper estimates a spatial wage structure for the United States.I employ the market-access and supplier-access method of Reddingand Venables (2004), where access is determined using interstate tradedata. Economic geography models predict that state-level wages arecorrelated to this measure, owing to higher levels of demand and betteravailability of intermediate goods in easily accessible regions. Aftercorrecting for omitted-variable bias with exogenous ‘first nature’ regressorsand using the appropriate instruments, I find that the explanatorypower of access-variables is weak in this dataset.

Keywords: Spatial wage structure; United States; Economic Geography (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-geo and nep-int
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Journal Article: Trade, location, and wages in the United States (2006) Downloads
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